Sorted by Commenter - Ethics - State of California

RRC – Rule 1.5 [4-200]
E-mails, etc. – Revised (6/1/2010)
could be added to clarify that a so-called "earned on receipt" flat fee paid in advance at the
outset of the lawyer-client relationship, without more, ordinarily is not an adverse interest. The
public comments received indicate that "earned on receipt" fee arrangements are asserted by
some lawyers as the basis of an immediate transfer of ownership and RPC 3-300 compliance
apparently is not being performed by these lawyers. So the issue you raise exists now, at least
to the extent that many lawyers are confused about what "earned" really means. Ideally, a
proposed Rule 1.5 could alert lawyers that these issues are not as simple as they seem and
also prompt better fee agreements and improved accountability in the handling of the advance
fees that are received.
June 1, 2010 Julien E-mail to RRC:
I am not surprised that we have received so many comments on this rule because it appears to
hit lawyers where it hurts. Somewhere we should have told them that a "nonrefundable
retainer" which is refundable is, by definition, an oxymoron.
June 1, 2010 Julien E-mail to RRC:
I agree with you regarding the issue where there is any confusion where lawyers think that the
rule allows a client to refuse to pay for any work the lawyer has done, should be clarified. I note
that at least one commenter seems to think this so there is some confusion. Your fix seems
adequate in your comment 1 on "nonrefundable retainers".
June 2, 2010 Sapiro E-mail to RRC List:
1. I am grateful to Harry, Kevin, and Randy for their “trial loge.” They have done a great job of
exposing drafting concerns regarding paragraphs (e) and (f).
2. Regarding Randy’s proposal for paragraph (e) attached to his May 28 th email, I am
concerned about the use of the word “or implies.” Because this is a disciplinary rule, I would
prefer that it only address an express agreement. To me, what an agreement “implies” is too
amorphous a concept to be a proper subject of discipline. I would delete the phrase “or
implies.”
3. I would change the phrase “will be non-refundable under any circumstance” to “will not be
refundable under any circumstance.” To me, that slight change in wording changes the
emphasis and eliminates potential nuances that might make the rule ambiguous.
4. Regarding the second sentence in Randy’s proposed paragraph (f)(2), I do not think we
need to refer to the intent of the parties. I would delete the phrase “it is the intent of the parties
that.” In addition, I think the second reference to the fee agreement in the second sentence of
paragraph (f)(2) is redundant. I would reword the sentence to state:
A lawyer’s agreement for a flat fee, paid in advance or otherwise, may state or
imply that fees paid pursuant to it are earned when paid.
RRC - 4-200 [1-5] - E-mails, etc. - REV (06-01-10).doc -159-
Printed: June 2, 2010